The price of Circle's stablecoin, USDC, is getting closer to its $1 peg.
USD Coin (USDC) nearly regained its dollar peg on Monday after Circle announced that its $3.3 billion deposit with the fallen Silicon Valley Bank (SVB) will be available.
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Circle was one of the major clients of SVB. The news about the fall of the crypto-friendly bank caused panic among USDC holders leading to the price slump.
On March 12th, the United States government promised depositors of SVB that all their funds will be available. The Circle CEO, Jeremy Allaire, assured its customers in a Twitter thread that its funds held in SVB are safe and that the crypto company has already secured a new banking partner.
100% of USDC reserves are also safe and secure, and we will complete our transfer for the remaining SVB cash to BNY Mellon.
The announcements triggered a price rally of USDC, which nearly attained its $1 peg on Monday, with the price hovering around 99 cents.
Jeremy Allaire also welcomed the intervention by the US government to protect the depositors of the falling banks, such as SVB. Regarding the matter, Allaire noted:
We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.”
Circle CEO also highlighted that the company will no longer use SigNet to process minting and redemption following the shutting down of Signature Bank. Instead, it will temporarily rely on BNY Mellon for settlements.
With the closure of Signature bank announced tonight, we will not be able to process minting and redemption through SigNet, we will be relying on settlements through BNY Mellon.
On top of that, Allaire confirmed that Circle had no deposits with another collapsed bank, Signature.
SVB and Signature are the latest in a handful of tech and crypto-focused financial institutions to fall recently. Silvagate Capital announced last week that it was planning a voluntary wind-down of operations for its Silvergate Bank.
At the time of writing, USDC retails for $0.9984.